Professional Documents
Culture Documents
Case-Kel 9
Case-Kel 9
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a of the farm and village where he grew up.
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communicat ple." To meet this vision
ion IKEA provides many
worldwide. well-designed, functional
T products for the home. It
h prices its products low
e so that as many people
I as possible can afford to
K buy them.
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A However, in creating low
prices IKEA is not willing
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to sacrifice its principles.
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‘Low price but not at any
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price’ is what IKEA says.
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This means it wants its
o
business to be
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sustainable. IKEA
is
supplies goods and
"
services to individuals in
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a way that has an
o
overall beneficial effect
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on people and the
r
environment. Customers
e
all over the world have
a
responded positively to
t
IKEA’s approach.
e
a The business idea is "To offer wide range of well designed, functional home
b furnishing products at
e prices so low that as many people as possible will be able to afford
tt them."
e The market positioning statement is "Your partner in
r better living. We do our part, you do yours. Together
e we save money."
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The IKEA Concept is based on offering a wide range of
well designed, functional home furnishing products at
prices so low that as many people as possible will be able
to afford them. Rather than selling expensive home
furnishings that only a few can buy, the IKEA Concept
makes it possible to serve the many by providing low-
priced products that contribute to helping more people live
a better life at home. The IKEA Concept guides the way
IKEA products are designed, manufactured, transported,
sold and assembled. All of these factors contribute to
transforming the IKEA Concept into a reality.
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IKEA stores are usually very large blue buildings with few windows and
yellow accents. They are designed around a "one-way" layout which
leads customers along "the long natural way." This layout is designed to
encourage the customer to see the store in its entirety (as opposed to a
traditional retail store, which allows a consumer to go right to the section
where the goods and services needed are displayed) although there are
often shortcuts to other parts of the showroom.
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tu oducts in flat pack
re form. Sometimes
w they are directed to
ar collect products
eh from an external
ou warehouse on the
se same site or at a
(S site nearby. Finally
elf they take their
S products to the
e cashier's station to
r make payment.
v Newer IKEA stores,
e make more use of
) glass, both for
aesthetic and
w functional reasons.
h Skylights are also
e now common in the
r Self-serve
e warehouses. More
natural light
t reduces energy
h costs, improves
e worker morale and
y gives a better
impression of the
c product.
o
l Whilst the original design
l involved the warehouse on
e the lower level and the
c showroom and
t marketplace on the upper,
today most stores globally
p have the Showroom
r upstairs with the
e marketplace and
v warehouse downstairs.
i Additionally, some stores
o are single level. Some
u stores maintain separate
s warehouses to allow more
l stock to be kept on-site at
y any given time, although
this occasionally results in
n challenges in finding the
o items, as well as a
t perception of having to
e queue in line twice.
d Single-level stores are
found predominantly in
s areas where the cost of
h land would be less than
o the cost of building a 2-
w level store – examples
r include the store in
o Saarlouis, Germany and
o Haparanda, Sweden.
m Some stores also have
dual level warehouses and
p machine controlled silos
r which allow large
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e a "no-returns"
no policy. Most
t IKEA stores
in communicate the
ne IKEA policy on
w environmental
co issues in the "as-
nd is." In the United
iti Kingdom, this is
on referred to as
or "Bargain
ta Corner."
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The vast majority of IKEA stores are located outside of city centres, primarily because of land cost
and traffic access. Several smaller store formats have been unsuccessfully tested in the past (the
"midi" concept in the early 90s, which was tested in Ottawa and Heerlen with 9,300 m2, or a
"boutique" shop in Manhattan).
1. Timings- An important feature of many IKEA stores is their long opening hours. Many IKEA
stores are in operation 24 hours a day with restocking and maintenance being carried out
throughout the night. However, public opening hours tend to be much longer than most other
retailers, with stores open well into the evening in many countries. In the UK for example,
almost all stores are open past 8pm with opening times often around 9-10am. Ikea Croydon
has one of the longest opening hours worldwide being open from 10am 12 Midnight Monday
to Friday.
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IKEA products are identified by single word names. Most of the names are Swedish in origin.
Although there are some notable exceptions, most product names are based on a special naming
system developed by IKEA in conjunction with Colin Edwards (international naming expert and
furniture enthusiast).
Upholstered furniture, coffee tables, rattan furniture, bookshelves, media storage, doorknobs:
Swedish placenames (for example: Klippan)
Beds, wardrobes, hall furniture: Norwegian place names
Dining tables and chairs: Finnish place names
Bookcase ranges: Occupationss
Bathroom articles: Scandinavian lakes, rivers and bays
Kitchens: grammatical terms, sometimes also other names
Chairs, desks: men's names
Materials, curtains: women's names
Garden furniture: Swedish islands
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For example, DUKTIG (meaning: good, well-behaved) is a line of children's toys, OSLO is a name of
a bed, BILLY (a Swedish masculine name) is a popular shelf, DINERA (meaning: (to) dine) for
tableware, KASSETT (meaning: cassette) for media storage. One range of office furniture is named
EFFEKTIV (meaning: efficient), SKÄRPT (meaning: sharp or clever) is a line of kitchen knives.
Because IKEA is a worldwide company working in several countries with several different languages,
sometimes the Nordic naming leads to problems where the word means something completely
different to the product. While exotic-sounding names draw attention, e.g., in anglophone countries, a
number of them call for a snicker. Notable examples include "Jerker" desk and "Fartfull" workbench.
Also, the most recent new product, Lyckhem (meaning bliss). The products are generally withdrawn,
probably after someone pointed at blunders, but not before generating some news.
Company founder Ingvar Kamprad, who is dyslexic, found that naming the furniture with proper
names and words, rather than a product code, made the names easier to remember.
IKEA publishes an annual catalogue. First published in
Swedish in 1951, the catalogue is now published in 55 editions,
in 27 languages for 36 countries, and is considered to be the
main marketing tool of the retail giant, consuming 70% of the
company's annual marketing budget.
IKEA has launched a loyalty card programme called "IKEA Family." The
distinctive orange card is free of charge and can be used to obtain
discounts on a special range of products found in each IKEA store. In
particular, it gives 25% off the price of commissioned ranges of IKEA
products on presentation of the card. The card also gives discounts on
food purchased in the restaurant and the Swedish Food Market. In
conjunction with the card, IKEA also publishes and sells a printed
quarterly magazine titled IKEA Family Live which supplements the card
and catalogue. The magazine is already printed in thirteen languages
and an English edition for the United Kingdom was launched in
February 2007. It is expected to have a subscription of over 500,000.
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The IKEA brand is the sum total of the emotional and rational
values that consumers associate with the IKEA trademark
and the reputation of our company. The brand image is the
result of over 50 years work by IKEA co-workers at all levels
all over the world.
The overall task of IKEA marketing
communication is to build the IKEA brand and
inspire people to come to the stores. The
IKEA concept builds on a relationship with the
consumer. Nine key messages are used
within the IKEA marketing communication to
build this relationship. These are
a d
designs have unnecessary features,
that are they give genuine solutions
bought for specific home furnishing
in bulk needs
to keep
and are made of the most suitable materials for their
costs
purpose.
down.
The right quality- IKEA
By
products are subjected to
making
rigorous tests to make sure that
all their
they meet national and
furnitur
international safety standards.
e flat
Convenient shopping- The
packed
IKEA store offers "everything
they cut
under one roof", most of it
down
available for immediate take-
on
away. IKEA offers service
transpo
where they need it, but allows
rtation
customers to make most of the
and
decisions themselves. This
assemb
means that they need to make
ly
it easy to choose the right
costs.
products by displaying them
Funct
correctly, describing them
ion -
accurately and having a simple
IKEA
returns policy.
produ
A day out for the whole
cts
family- IKEA aim to look after
are
thier customers by planning for
based
their needs. Not only do they
on a
provide inspiration and ideas,
functi
but they also encourage people
onal
to touch, feel and use the
appro
products on display to see how
ach to
they would fit into their own
desig
home. They have new products
n.
arriving all the time, seasonal
IKEA
themes, play areas for children,
desig
special events and a great
n
value family restaurant.
mean
s Swedish IKEA, - The key IKEA
produ messages all have their roots in the
cts Swedish origin of IKEA. Swedish
that furniture is light and fresh yet
are unpretentious. The warm welcoming
attrac Swedish style has become a model of
tive, simplicity, practicality, and informality
practi that is now world renown.
cal
and
easy
to
use.
They
don't
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1. The IKEA product range is our starting point. All other marketing communication is used to
amplify the product range.
2. The store is the IKEA retailer’s primary medium for presenting and communicating the range,
its low price and the IKEA concept.
3. The IKEA catalogue is the main marketing tool with around 70% of of the annual marketing
budget being spent on this alone. It is produced in 38 different editions, in 17 languages for 28
countries. 110 million catalogues were circulated last year - three times higher than that of the
Bible, with 13 million of these being available in the UK.
4. The IKEA advertising, PR and other types of communication are complements to the
IKEA range; store and catalogue are used to spearhead the penetration of our target market.
Although IKEA household products and furniture are designed
in Sweden, they are largely manufactured in developing
countries to keep down costs. With suppliers in 50 countries,
roughly 2/3 of purchasing is from Europe with about 1/3 from
Asia. A small amount of products are produced in North
America. Comparatively little production actually takes place
in Sweden, though it still remains the fourth-largest supplier
country (behind China, Poland and Italy). China accounts for
about 2.5 times as much supply as Sweden. For most of its
products, the final assembly is performed by the end-user
(consumer).
For IKEA, distribution is an important part of the equation of creating home
furnishing articles at prices which are as low as possible. Today
approximately 10,000 IKEA products are manufactured by 1,600 suppliers
and transported to 186 IKEA stores around the world, often via one of the
company’s 27 centra l warehouses and distribution centres. At IKEA,
distribution is all about making the route from the manufacturer to the
customer as short as possible.
In the early days of IKEA, the “warehouse” was a shed on Elmtaryd Farm in
the south of Sweden where the founder of the company, Ingvar Kamprad,
lived with his parents. In those days products were despatched from Elmatryd
with the help of the county milk van that visited the farm each day. Things have changed a bit since
then, however. Today IKEA operates 27 distribution centres in a total of 16 countries. From here IKEA
products are delivered to 186 stores around the world – 165 IKEA Group stores and a further 21
stores operated by other franchisees.
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IKEA works in various ways not only to rationalise and simplify distribution, but also to minimise the
impact this part of the business has on the environment. The secret is to calculate as exactly as
possible how many products will be needed to satisfy demand. This eliminates any unnecessary costs
for production and warehousing.
The aim, of course, is to make sure that the right products are always available at the store when the
customers wish to buy them.
The fact that IKEA products are sold packed fl at means that they can be transported with greater
efficiency. By minimising “wasted space” it is possible to transport and store more packages at a time.
And by increasing what is known as “the filling rate” in containers etc. (in other words, reducing the
amount of wasted space), the cost of transporting each item goes down. One good example of this is
HOTT kettle. Making better use of the available space by stacking some of the kettles upside down
makes it possible to fit ten kettles into a box instead of just six. As a result, less packaging materials
are needed and distribution costs are kept lower.
Today 60 percent of all IKEA freight is transported by road, 20 percent by rail and 20 percent by sea.
Less than one percent is air freighted. The aim is to constantly increase the proportion of goods
transported by rail. Within the next three years 40 percent of all IKEA freight within Europe will be
moved by rail. For some years now, all the freight companies working with IKEA have been required
to provide statistics for a so called “Environmental Performance Sheet” that details how their
operations impact on the environment. This enables IKEA to keep a check on these companies’
environmental work and to monitor what measures they are introducing to reduce the use of fuel and
minimise emissions.
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The INGKA Foundation is officially dedicated to
promoting “innovations in architecture and interior
design.” With an estimated net worth of $36 billion, the
foundation is unofficially the world’s largest charitable
organization, beating out the much better known Bill and
Melinda Gates Foundation, which has a net worth of
approximately $33 billion.
Notwithstanding the Ingka Foundation's lack of concerted philanthropic activity, IKEA is involved in
several international charitable causes, particularly in partnership with UNICEF. These include:
In the wake of the 2004 Boxing Day Tsunami, IKEA Australia agreed to match dollar for dollar
co-workers donations and donated all sales of the IKEA Blue Bag to the cause.
After the Pakistan earthquake of 2006, IKEA gave 500,000 blankets to the relief effort in the
region
IKEA has provided furniture for over 100 "bridge schools" in Liberia.
In the 2008 Sichuan earthquake in China, IKEA Beijing sold an alligator toy for 40 yuan
(US$5.83, €3.70) with all income going to the children in the earthquake struck area
IKEA also supports American Forests to restore forests and reduce pollution.
Links with Education In 2008 IKEA was a supporter of the Design Wales Ffres Awards, providing a
creative brief for undergraduate design competition.
In September 2005 IKEA Social Initiative was formed to
manage the company’s social involvements on a global level.
IKEA Social Initiative is headed by Marianne Barner. The
main partners to IKEA Social Initiative are UNICEF and Save
the Children.
Examples of involvements:
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IKEA through IKEA Social Initiative contribute €1 to UNICEF and Save the Children from each
soft toy sold during the holiday seasons, raising a total of €16.7 million so far.
IKEA Social Initiative provided soft toys to children in cyclone affected Myanmar.
Starting in June 2009, for every Sunnan solar-powered lamp sold in IKEA stores worldwide,
IKEA Social Initiative will donate one Sunnan with the help of UNICEF.
In 1990, IKEA invited Karl-Henrik Robèrt, founder of The Natural Step, to address its board of
directors. Robert's system conditions for sustainability provided a strategic approach to improving the
company's environmental performance. This led to the development of an Environmental Action Plan,
which was adopted in 1992. The plan focused on structural change, allowing IKEA to "maximize the
impact of resources invested and reduce the energy necessary to address isolated issues." The
environmental measures taken, include the following:
More recently, IKEA has stopped providing plastic bags to customers, but
offers reusable bags for sale. The IKEA restaurants also only offer
reusable plates, knives, forks, spoons, etc. Toilets in some IKEA restrooms have been outfitted with
dual-function flushers. Most stores only offer paper plates and plastic knives, forks, and spoons. IKEA
has recycling bins for compact fluorescent lamps (CFLs), energy saving bulbs, and batteries. In 2001
IKEA was one of the first companies to operate its own cross-border freight trains through several
countries in Europe. In August 2008, IKEA also announced that it had created IKEA GreenTech, a
€50 million venture capital fund. Located in Lund (a college town in Sweden), it will invest in 8-10
companies in the coming five years with focus on solar panels, alternative light sources, product
materials, energy efficiency, and water saving and purification. The aim is to commercialise green
technologies for sale in IKEA stores within 3–4 years.
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